1. A
Interest rates at a low of 2% cause consumers to take out loans and buy homes.
Expansion

2. B
Due to factory closures unemployment has risen to a five year high of 10%
Trough

3. C
Due to increased consumer spending, the Federal Reserve raises interest rates to slow the economy down.
Expansion

4. D
The DOW Jones industrial average (stock market) reaches an all-time high
Peak

5. E
GDP declines for four consecutive months, causing the Federal Reserve to lower interest rates.
Contraction

6. The unemployment rate is at 3.4%, a new 15 year low.F
The unemployment rate is at 3.4%, a new 15 year low.
Peak

7. Stores continue to place large orders to keep up with growing demand.
Expansion

8. Business surpluses accumulate because consumer demand has fallen off.
Contraction

9. I
Consumers begin to cut back on spending for luxuries such as entertainment.
Contraction

10. There is a boom in vacation real estate investments.J
There is a boom in vacation real estate investments.
Expansion

11. Car dealers lower prices and offer rebates to attract customers.K
Car dealers lower prices and offer rebates to attract customers.
Contraction

12. A large number of major corporations and banks go out of business.
Trough

13. New high tech businesses begin hiring many of the unemployed.
Expansion